Gulzara Tariq, Huaping SUN, Muhammd Haris, Yusheng KONG


The aim of this study is to investigate relationship between economic growth and energy consumption in Pakistan, India, Bangladesh and Sri Lanka by using instrumental variable regression analysis. In investigation process energy consumption, economic growth, urban population, FDI and trade data is used from 1981-2015. Several outcomes are presented in this paper, first, increase in economic growth tends to increase in energy consumption, second, these countries are energy dependent and sensitive to supply of energy shocks. Thirdly, increase in trade has negative correlation with energy consumption as it introduces the energy efficient technology. In these situations policy makers should find the ways to improve economy with efficient resources so that energy consumption will be lower. So, to improve the energy efficiency in developing countries this research provides the significant policy implications.

Full Text:



Al-Mulali, U. and I. Ozturk (2015). "The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region." Energy 84: 382-389.

Asafu-Adjaye, J. (2000). "The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries." Energy economics 22(6): 615-625.

Bastola, U. and P. Sapkota (2015). "Relationships among energy consumption, pollution emission, and economic growth in Nepal." Energy 80: 254-262.

Begum, R. A., K. Sohag, S. M. S. Abdullah and M. Jaafar (2015). "CO 2 emissions, energy consumption, economic and population growth in Malaysia." Renewable and Sustainable Energy Reviews 41: 594-601.

Behmiri, N. B. and J. R. P. Manso (2013). "How crude oil consumption impacts on economic growth of Sub-Saharan Africa?" Energy 54: 74-83.

Behmiri, N. B. and J. R. P. Manso (2014). "The linkage between crude oil consumption and economic growth in Latin America: The panel framework investigations for multiple regions." Energy 72: 233-241.

Belke, A., F. Dobnik and C. Dreger (2011). "Energy consumption and economic growth: New insights into the cointegration relationship." Energy Economics 33(5): 782-789.

Bildirici, M. E. and T. Bakirtas (2014). "The relationship among oil, natural gas and coal consumption and economic growth in BRICTS (Brazil, Russian, India, China, Turkey and South Africa) countries." Energy 65: 134-144.

Chang, C.-C. (2010). "A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China." Applied Energy 87(11): 3533-3537.

Chontanawat, J., L. C. Hunt and R. Pierse (2008). "Does energy consumption cause economic growth?: Evidence from a systematic study of over 100 countries." Journal of Policy Modeling 30(2): 209-220.

Dunkerley, J. (1982). "Estimation of energy demand: the developing countries." The Energy Journal 3(2): 79-99.

Ebohon, O. J. (1996). "Energy, economic growth and causality in developing countries: a case study of Tanzania and Nigeria." Energy policy 24(5): 447-453.

Ebohon, O. J., B. Field and C. Pugh (2000). "Satisfying current and future energy demand in sub-Saharan African cities: the implications for urban environmental sustainability." Proceedings: Strategies for sustainable built environment. Pretoria, South Africa.

Esseghir, A. and L. H. Khouni (2014). "Economic growth, energy consumption and sustainable development: The case of the Union for the Mediterranean countries." Energy 71: 218-225.

Fatai, K., L. Oxley and F. Scrimgeour (2004). "Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, The Philippines and Thailand." Mathematics and Computers in Simulation 64(3): 431-445.

Ghali, K. H. and M. I. El-Sakka (2004). "Energy use and output growth in Canada: a multivariate cointegration analysis." Energy economics 26(2): 225-238.

Gross, C. (2012). "Explaining the (non-) causality between energy and economic growth in the US—a multivariate sectoral analysis." Energy Economics 34(2): 489-499.

Henderson, V. (2003). "The urbanization process and economic growth: The so-what question." Journal of Economic growth 8(1): 47-71.

Jumbe, C. B. (2004). "Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi." Energy economics 26(1): 61-68.

Kraft, J. and A. Kraft (1978). "On the relationship between energy and GNP." The Journal of Energy and Development: 401-403.

Ladu, M. G. and M. Meleddu (2014). "Is there any relationship between energy and TFP (total factor productivity)? A panel cointegration approach for Italian regions." Energy 75: 560-567.

Leit, N. C. (2014). "Economic growth, carbon dioxide emissions, renewable energy and globalization." International Journal of Energy Economics and Policy 4(3): 391.

Ma, H. and L. Oxley (2012). "The emergence and evolution of regional convergence clusters in China's energy markets." Energy Economics 34(1): 82-94.

Ma, H., L. Oxley and J. Gibson (2010). "China's energy economy: A survey of the literature." Economic systems 34(2): 105-132.

Masih, A. M. and R. Masih (1996). "Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques." Energy economics 18(3): 165-183.

Masih, A. M. and R. Masih (1997). "On the temporal causal relationship between energy consumption, real income, and prices: some new evidence from Asian-energy dependent NICs based on a multivariate cointegration/vector error-correction approach." Journal of policy modeling 19(4): 417-440.

Omri, A. (2013). "CO 2 emissions, energy consumption and economic growth nexus in MENA countries: evidence from simultaneous equations models." Energy economics 40: 657-664.

Park, S.-Y. and S.-H. Yoo (2014). "The dynamics of oil consumption and economic growth in Malaysia." Energy Policy 66: 218-223.

Rafiq, S. (2008). Energy consumption and income in six Asian developing countries: a multivariate cointegration analysis. Proceedings of the 2nd IAEE Asian Conference: Energy Security and Economic Development under Environmental Constraints in the Asia-Pacific Region, Curtin University of Technology.

Rosenberg, N. (1998). "The role of electricity in industrial development." The Energy Journal: 7-24.

Saboori, B. and J. Sulaiman (2013). "CO 2 emissions, energy consumption and economic growth in Association of Southeast Asian Nations (ASEAN) countries: a cointegration approach." Energy 55: 813-822.

Salahuddin, M. and J. Gow (2014). "Economic growth, energy consumption and CO 2 emissions in Gulf Cooperation Council countries." Energy 73: 44-58.

Shahbaz, M., A. Chaudhary and I. Ozturk (2017). "Does urbanization cause increasing energy demand in Pakistan? Empirical evidence from STIRPAT model." Energy 122: 83-93.

Sheng, Y., X. Shi and D. Zhang (2013). "Economic development, energy market integration and energy demand: Implications for East Asia." Energy Strategy Reviews 2(2): 146-152.

Soytas, U. and R. Sari (2003). "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets." Energy economics 25(1): 33-37.

Soytas, U. and R. Sari (2007). "The relationship between energy and production: evidence from Turkish manufacturing industry." Energy economics 29(6): 1151-1165.

Tang, C. F. and M. Shahbaz (2013). "Sectoral analysis of the causal relationship between electricity consumption and real output in Pakistan." Energy Policy 60: 885-891.

Tang, C. F. and B. W. Tan (2015). "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam." Energy 79: 447-454.

Templet, P. H. (1999). "Energy, diversity and development in economic systems; an empirical analysis." Ecological Economics 30(2): 223-233.

Toman, M. A. and B. Jemelkova (2003). "Energy and economie development: An assessment of the state of knowledge." The Energy Journal: 93-112.

Wolde-Rufael, Y. (2004). "Disaggregated industrial energy consumption and GDP: the case of Shanghai, 1952–1999." Energy economics 26(1): 69-75.

Yoo, S.-H. (2006). "The causal relationship between electricity consumption and economic growth in the ASEAN countries." Energy policy 34(18): 3573-3582.

Zhang, K. H. and S. Shunfeng (2003). "Rural–urban migration and urbanization in China: Evidence from time-series and cross-section analyses." China Economic Review 14(4): 386-400.

Zhang, W. and S. Yang (2013). "The influence of energy consumption of China on its real GDP from aggregated and disaggregated viewpoints." Energy Policy 57: 76-81.


  • There are currently no refbacks.